Trade War with China

Air Force Brat said:

No Mangi, here again, you're showing your ignorance, I can assure you, I have an Italian made Pinarello Prince I'm the one who just told you the Prince was now made in TAIWAN. I can assure you, your 400 dollar Chinese copy of a Pinarello is not a true assymetrical Pinarello.

and this is indeed the essence of Mr. Trump's point of renegotiating with China, China has attempted to copy a high end Pinarello, and they market the Chinarello as a Pinarello, as for material, the real Taiwan Prince is made with very, very high integrity carbon fibre, and the geometry is indeed much more complicated than you realize... so enjoy your bike, you would probably be happier now if you were out riding, I know I would be...

Intellectual property rights are central to the trade issue, and the Pinarello name is trademarked, to sell your bike on ebay as a Pinarello is considered fraud, but lots of folks are attempting to do just that... anyway, good night....

Click to expand...

Air Force Brat said:

No Mangi, here again, you're showing your ignorance, I can assure you, I have an Italian made Pinarello Prince I'm the one who just told you the Prince was now made in TAIWAN.

Click to expand...

Air Force Brat said:

I can assure you, your 400 dollar Chinese copy of a Pinarello is not a true assymetrical Pinarello.

Click to expand...

Air Force Brat said:

and this is indeed the essence of Mr. Trump's point of renegotiating with China, China has attempted to copy a high end Pinarello, and they market the Chinarello as a Pinarello

Click to expand...

Air Force Brat said:

as for material, the real Taiwan Prince is made with very, very high integrity carbon fibre, and the geometry is indeed much more complicated than you realize... so enjoy your bike, you would probably be happier now if you were out riding, I know I would be...

Click to expand...

Air Force Brat said:

Intellectual property rights are central to the trade issue, and the Pinarello name is trademarked, to sell your bike on ebay as a Pinarello is considered fraud, but lots of folks are attempting to do just that... anyway, good night....

Click to expand...

gelgoog said:

I was just giving an example. But China still doesn't have any photo-lithography machine tool manufacturers. Like I said, there is a total of THREE manufacturers worldwide. Europe, the United States, and Japan. With the Japanese vendor being way behind the other two. All the semiconductor factories the Chinese are building will rely on those tools. Due to sanctions the Chinese can only buy tools which are two generations behind as is. China is still behind even in process engineering, which isn't exactly simple either. Even with all the IP theft SMIC has done to TSMC they are still way behind in process engineering. i.e. how to actually use the tools to produce good performance chips.

Process might not matter as much in some parts of the military segment, like most weapons systems, but it does matter in the consumer sector. It means the chips will either use more power or will have less performance. As for "Moore's Law being dead" people have been claiming that since the 1970s. It slowed down in the past decade but it has not stopped yet. There is a roadmap to continue the process improvements for at least another decade.

Back when the F-22 came out, it used leading edge processes in the processors it came with, the radar also required a leading edge process. Now, that over a decade has passed, those processes are old hat. At the time those processors were required to do signal processing for the AESA radar. However the thing with radar algorithms is that the more computing power you can dedicate to them the more accurate the results you will get. China will always be two process generations behind due to current trade laws. This can as little as 4 or as many as 6 years behind the leading edge. Now that people are focused on AI even the current processes are not dense enough for the required applications. e.g. autonomous driving. these technologies rather obviously also have military applications. DARPA originally sponsored autonomous driving technology in the USA for example. This was intended to be used in logistics trucks and the like, but could be used in other applications as well.

Being two processes behind means that while, for example, you can put a 32GB NAND Flash chip on a smartphone, the other competitor, with a leading edge process, can put a 128GB NAND Flash chip which takes the same volume inside the smartphone. You have a dual-core chip, they have an eight-core chip. i.e. it's the difference between competing at the top end of the market, where most of the profit is, and being at the bottom end of the market, with razor-thin margins.

You claim at one point it will cease to matter. But the thing is, new applications always come up, once it was 3D graphics, then higher screen resolutions, right now, it is AI applications.

China has had some successes in the machine tool industry. Like for example when they bought KUKA in Germany (a deal which I'm still unsure how the Germans even allowed to pass). Can you even remember the name of a single heavy construction machine vendor from China? Because I sure can't. Let alone precision machine tools.

China has had successes in the solar cell and battery cell markets but the semiconductor market will be a lot tougher to crack.

Click to expand...

Chinese tech billionaire Jack Ma's promise to create 1 million new US jobs is the latest casualty of the trade war.
The Alibaba (

Please, Log in or Register to view URLs content!

) chief grabbed attention at the start of last year when

Please, Log in or Register to view URLs content!

following a meeting with Donald Trump, who was president elect at the time.

But in an interview published late Wednesday by China's official news agency, Xinhua, Ma said the waves of new tariffs imposed by Washington and Beijing in recent months have undermined the plan.

"This promise was on the basis of friendly China-US cooperation and reasonable bilateral trade relations, but the current situation has already destroyed that basis," Ma said. "This promise can't be completed."

A spokeswoman for Alibaba, China's biggest e-commerce company, confirmed Ma's comments to CNN.

Analysts had already

Please, Log in or Register to view URLs content!

, which Alibaba announced after Trump and Ma met at Trump Tower in New York in January 2017.

The vague promise wasn't based on Alibaba investing in the United States to build factories or fulfillment centers. Instead, Ma talked about stimulating trade by helping American small businesses sell their products to consumers in China and elsewhere in Asia.

In the Xinhua interview, Ma said Alibaba "will not stop promoting the healthy development of China-US trade."

He already voiced his fears about the trade war this week, telling investors it could drag on for as long as 20 years.

"It's going to last long, it's going to be a mess," he

Please, Log in or Register to view URLs content!

Tuesday in Hangzhou, the city where Alibaba is based.

Click to expand...

The United States announced tariffs on another 200 billion dollars' worth of imports from China starting next week, which will go up to 25 percent in January from the present 10 percent.

Meanwhile, US President Donald Trump threatened to tax the remaining 267 billion dollars in imports if China fights back. Beijing said it had no choice but to retaliate against the US with tariffs on 60 billion US dollars' worth of its exported goods.

According to Geng Shuang, China's Foreign Ministry spokesperson, China took countermeasures to protect its legitimate rights and interests and safeguard the global order of free trade. Moreover, the US action has brought new uncertainty to the trade negotiations between the two sides.

Zhao Hai, an assistant research fellow at the Chinese Academy of Social Sciences, said that trade negotiation was pushed further because of the capricious actions by the Trump administration.

"Beijing is receiving the mixed message," said Zhao. "Trump seemed to reach out for a fair negotiation, but at the same time he was slapping tariffs from the back." Zhao believes that Trump feels satisfied with his trade policies and is highly likely to go along the road until all imports from China are taxed.

The escalating tariff war triggered more concerns among US economic experts. Saruhan Hatipoglu, former CEO of Business Environment Risk Intelligence, said that the trade war should not have gone this far.

As the 60 billion US dollars' worth of products that China imposed tariffs on made up the last part of all US exports to China, it is widely discussed whether China has run out of options. Hatipoglu gave his answer: Not yet.

"China is not tit-for-tat in exports, but they have other avenues, like currency," said Hatipoglu. "Remember what happened to the US stock market in August 2015 when Chinese currency lost value? And stock market gives a lot of emphasis to this president.”

Other than that, the US companies operating in the Chinese market are under potential threats once the trade war continued.

Unlike big companies like Apple, who have enough political influence to get some products out of the tariff list, the most hurt section consists of small to medium size companies who rely largely on intermediate goods from China.

The most controversial part of the present trade tactics by the Trump administration is not the increasing pressure on US consumers, but the belief that once the trade deficit is closed, the cozy lives of the American people also come to an end. Counterintuitive as it might sound, the logic is quite simple.

"We spend less on the products that we can't make cheaply, and more on American stuff that bears much more value and create more jobs," said Hatipoglu. "If you are a developed country, and your consumers are strong, you are going to have a trade deficit, period.”

Jack Ma, who recently stepped down as Alibaba's chairman, said that the trade war can last for decades to come. Amy Holmes, a political commentator and co-host of the public television show "In Principle," said that China has a much longer planning horizon both economically and politically than the US and that it can wait out the present administration.

Some opinions indicated that Trump, as a businessman, only wants to secure an economic victory rather than a political, long-term, comprehensive reassurance of the US dominance to the world.

Others have different views. Hatipoglu, for instance, said that the trade war kicked off a fundamental attitude change to Beijing's economy.

"It's not just about tariffs, it's about China 2025 and 2030," said Hatipoglu. "Three out of five largest start-ups are Chinese, and technology services in China grew 30 percent in the first quarter on a year-on-year basis. China has evolved from a low to an advanced manufacturing country, or even more, a high tech country."

However, the full speed development of China was based on its previous strong tie with the US and has not grown to be a real threat to the US economy.

"Growing a bigger pie with China, instead of competing for one small pie, is a better strategy for the US," said Zhao Hai.

Ryan Patel, a global business executive, believed that despite all the chaos going on, the two countries would eventually come to the negotiating table as a result of the deeply entrenched economic interests.

"There is going to be a deal, and the remaining problem is when," said Ryan. "Both countries won't back down until they get a win-win deal. But it's clear that the US and China need each other, and there is no plan B in that sense.

Click to expand...

xiabonan said:

You'd have to be so ignorant to say that China does not understand the importance of building up a robust machine tool industry. Do you still imagine China only produce clothes, toys, and other cheap labour intensive products?

Machinery and electronics products are now top Chinese export products, and China has been the number 1 producer of CNC machines in terms of total manufacturing value for years now.

In terms of CNC machines, China has completely dominated the low-end market, which is a market that's still rapidly growing both domestically and internationally, and China has been gaining a strong foothold in high-end CNC machines in recent years too.

This phenomenon is not limited to CNC machines. It is everywhere. On the low end, Chinese companies dominate and drive away foreign competitors, and on the medium to high end, some Chinese firms are starting to gain a foothold, mastering some key technologies and learning to do some others, and on the ultra-high-end, a number of Western firms still dominate.

However, as much as desire independence and control of key technologies, we also know that we could only improve by learning and trading with others.

This path has proven to be successful. I think people here should be most familiar with the achievements of this policy. Merely 20 years ago China could barely build any new modern warships, fighter jets, transport plane, and submarines.

Click to expand...

xiabonan said:

Today we have them all and we can build them all, and we achieved these milestones under constant Western sanctions for military related products and machinery.

Click to expand...

gelgoog said:

I was just giving an example. But China still doesn't have any photo-lithography machine tool manufacturers. Like I said, there is a total of THREE manufacturers worldwide. Europe, the United States, and Japan. With the Japanese vendor being way behind the other two. All the semiconductor factories the Chinese are building will rely on those tools. Due to sanctions the Chinese can only buy tools which are two generations behind as is. China is still behind even in process engineering, which isn't exactly simple either. Even with all the IP theft SMIC has done to TSMC they are still way behind in process engineering. i.e. how to actually use the tools to produce good performance chips.

Process might not matter as much in some parts of the military segment, like most weapons systems, but it does matter in the consumer sector. It means the chips will either use more power or will have less performance. As for "Moore's Law being dead" people have been claiming that since the 1970s. It slowed down in the past decade but it has not stopped yet. There is a roadmap to continue the process improvements for at least another decade.

Back when the F-22 came out, it used leading edge processes in the processors it came with, the radar also required a leading edge process. Now, that over a decade has passed, those processes are old hat. At the time those processors were required to do signal processing for the AESA radar. However the thing with radar algorithms is that the more computing power you can dedicate to them the more accurate the results you will get. China will always be two process generations behind due to current trade laws. This can as little as 4 or as many as 6 years behind the leading edge. Now that people are focused on AI even the current processes are not dense enough for the required applications. e.g. autonomous driving. these technologies rather obviously also have military applications. DARPA originally sponsored autonomous driving technology in the USA for example. This was intended to be used in logistics trucks and the like, but could be used in other applications as well.

Being two processes behind means that while, for example, you can put a 32GB NAND Flash chip on a smartphone, the other competitor, with a leading edge process, can put a 128GB NAND Flash chip which takes the same volume inside the smartphone. You have a dual-core chip, they have an eight-core chip. i.e. it's the difference between competing at the top end of the market, where most of the profit is, and being at the bottom end of the market, with razor-thin margins.

You claim at one point it will cease to matter. But the thing is, new applications always come up, once it was 3D graphics, then higher screen resolutions, right now, it is AI applications.

China has had some successes in the machine tool industry. Like for example when they bought KUKA in Germany (a deal which I'm still unsure how the Germans even allowed to pass). Can you even remember the name of a single heavy construction machine vendor from China? Because I sure can't. Let alone precision machine tools.

China has had successes in the solar cell and battery cell markets but the semiconductor market will be a lot tougher to crack.

Click to expand...